EUR/GBP Mid-Day Outlook

Daily Pivots: (S1) 0.9060; (P) 0.9080; (R1) 0.9107; More…

EUR/GBP retreats sharply after hitting upper channel resistance. A temporary top is in place at 0.9097 and intraday bias is turned neutral first. Deeper retreat could be seen to 4 hour 55 EMA (now at 0.9016). But downside should be contained well above 0.8895 and bring rise resumption. On the upside, above 0.9097 will resume the rally from 0.8620 and target 0.9305 key resistance.

In the bigger picture, EUR/GBP is staying in long term range pattern from 0.9304 (2016 high). The corrective structure of the fall from 0.9305 to 0.8620 is raising the chance that rise from 0.8312 to 0.9305 is an impulsive move. But we’re not too confident on it yet. In any case, we’d stay cautious on strong resistance from 0.9304/5 to limit upside in case of further rally. Meanwhile, if there is another medium term decline, strong support will likely be seen from 0.8303 to contain downside.

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